Strategy (NASDAQ:MSTR) Rating Increased to Hold at Zacks Research

Key Points

• Zacks Research upgraded Strategy (NASDAQ:MSTR) from a “strong sell” to a “hold,” even as the stock remained under pressure and was down 3.4% on the day. Broader analyst sentiment is still mixed, with a consensus rating of Moderate Buy and a consensus price target of $275.40.
• Strategy’s latest earnings showed major EPS weakness, reporting an adjusted loss of $38.25 per share versus expectations for a much smaller loss. Revenue came in above estimates at $124.3 million and rose 11.9% year over year.
• The company is drawing attention for its Bitcoin monetization strategy, including sales to help fund preferred dividends, while some analysts view the move as supportive of liquidity and others see it as a risk to its Bitcoin-heavy investment thesis. Mizuho recently cut its price target to $213 from $265 amid those concerns.

Strategy (NASDAQ:MSTR - Get Free Report) was upgraded by investment analysts at Zacks Research from a "strong sell" rating to a "hold" rating in a report released on Monday,Zacks.com reports.

MSTR has been the subject of a number of other research reports. Texas Capital raised shares of Strategy to a "strong-buy" rating in a report on Thursday, March 19th. Cantor Fitzgerald reiterated an "overweight" rating on shares of Strategy in a report on Monday, June 15th. Barclays began coverage on shares of Strategy in a report on Tuesday. They issued an "overweight" rating for the company. Weiss Ratings restated a "hold (c)" rating on shares of Strategy in a report on Wednesday, June 24th. Finally, Canaccord Genuity Group dropped their price target on Strategy from $163.00 to $130.00 and set a "buy" rating for the company in a research report on Tuesday, June 30th. One investment analyst has rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat.com, Strategy currently has a consensus rating of "Moderate Buy" and a consensus price target of $275.40.

Strategy Stock Down 3.4%

MSTR opened at $97.36 on Monday. The company has a market cap of $34.12 billion, a PE ratio of -2.42 and a beta of 3.54. Strategy has a twelve month low of $81.81 and a twelve month high of $457.22. The company has a 50-day moving average price of $138.77 and a 200 day moving average price of $142.88. The company has a quick ratio of 6.05, a current ratio of 6.05 and a debt-to-equity ratio of 0.22.

Strategy (NASDAQ:MSTR - Get Free Report) last announced its earnings results on Tuesday, May 5th. The software maker reported ($38.25) EPS for the quarter, missing analysts' consensus estimates of ($0.86) by ($37.39). The firm had revenue of $124.30 million for the quarter, compared to analyst estimates of $120.75 million. Strategy had a negative net margin of 2,482.01% and a negative return on equity of 26.97%. Strategy's revenue was up 11.9% compared to the same quarter last year. During the same period in the previous year, the company earned ($16.49) EPS. Sell-side analysts expect that Strategy will post 116.7 earnings per share for the current fiscal year.

Insider Activity

In other news, CFO Andrew Kang sold 1,949 shares of Strategy stock in a transaction that occurred on Tuesday, June 9th. The shares were sold at an average price of $123.84, for a total transaction of $241,364.16. Following the sale, the chief financial officer owned 71,044 shares of the company's stock, valued at approximately $8,798,088.96. The trade was a 2.67% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CAO Jeanine Montgomery sold 354 shares of the stock in a transaction that occurred on Tuesday, June 9th. The stock was sold at an average price of $123.84, for a total value of $43,839.36. Following the completion of the transaction, the chief accounting officer owned 11,209 shares of the company's stock, valued at $1,388,122.56. The trade was a 3.06% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders have acquired 11,166 shares of company stock worth $1,014,265 and have sold 190,822 shares worth $24,833,559. Insiders own 6.49% of the company's stock.

Institutional Trading of Strategy

Several institutional investors and hedge funds have recently bought and sold shares of the stock. Capital International Investors increased its stake in Strategy by 37.3% during the fourth quarter. Capital International Investors now owns 20,614,868 shares of the software maker's stock worth $3,132,460,000 after purchasing an additional 5,600,573 shares during the period. Vanguard Group Inc. boosted its stake in shares of Strategy by 21.0% in the fourth quarter. Vanguard Group Inc. now owns 24,062,886 shares of the software maker's stock valued at $3,656,356,000 after purchasing an additional 4,178,611 shares during the period. Amundi grew its holdings in shares of Strategy by 373.7% in the fourth quarter. Amundi now owns 4,790,702 shares of the software maker's stock valued at $727,947,000 after purchasing an additional 3,779,340 shares in the last quarter. Norges Bank purchased a new stake in Strategy during the 4th quarter worth approximately $536,140,000. Finally, Capital Research Global Investors lifted its holdings in Strategy by 66.7% during the 4th quarter. Capital Research Global Investors now owns 7,008,535 shares of the software maker's stock worth $1,064,963,000 after buying an additional 2,803,277 shares in the last quarter. 59.84% of the stock is currently owned by hedge funds and other institutional investors.

Key Headlines Impacting Strategy

Here are the key news stories impacting Strategy this week:

• Neutral Sentiment: Strategy said the Bitcoin sale was part of its new monetization framework and that it still held 843,775 BTC plus $2.55 billion in dollar reserves, suggesting it has liquidity to support preferred payouts. Strategy Sells 3,588 Bitcoin for $216 Million to Fund Preferred Dividends
• Neutral Sentiment: Grayscale and Bernstein offered a more constructive read, arguing the sale may reduce financing risk and help stabilize the balance sheet, while Bernstein kept a $150,000 year-end Bitcoin target. Strategy sells 3,588 Bitcoin for $216M to fund dividends, keeps $2.55B reserve intact
• Negative Sentiment: Mizuho cut its price target on Strategy to $213 from $265, reflecting a more cautious view as the company’s Bitcoin monetization plan and sale of BTC below its cost basis raise valuation concerns. Strategy had its price target lowered by Mizuho from $265.00 to $213.00
• Negative Sentiment: Other coverage flagged that the sale may signal Strategy is moving away from being a pure Bitcoin accumulator, which could unsettle bulls who bought the stock as a leveraged Bitcoin proxy. Strategy is losing a lot of money on bitcoin. Here’s why it’s selling anyway.

Strategy Company Profile

Strategy, formerly known as MicroStrategy, Incorporated NASDAQ: MSTR is a global provider of enterprise analytics and mobility software. The company’s flagship platform offers business intelligence, data discovery, and advanced visualizations that enable organizations to analyze large volumes of data and deliver actionable insights. In addition to traditional on-premises deployments, Strategy provides a range of cloud-based services and managed offerings that allow customers to leverage the power of its analytics tools without managing complex infrastructure.

Founded in 1989 by Michael J.

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